Step 10 – Open a Business Bank Account
Open a business account when you're ready to start accepting or spending money as your business. A business bank account helps you stay legally compliant and protected. It also provides benefits to your customers and employees.
Business Bank Account Perks
Most business bank accounts offer perks that don't come with a standard personal bank account.
- Preparedness - Business banking usually comes with the option for a line of credit for the company. This can be used in the event of an emergency, or if your business needs new equipment.
- Professionalism - Customers will be able to pay you with credit cards and make checks out to your business instead of directly to you. Plus, you'll be able to authorize employees to handle day-to-day banking tasks on behalf of the business.
- Protection - Business banking offers limited personal liability protection by keeping your business funds separate from your personal funds. Merchant services also offer purchase protection for your customers and ensures that their personal information is secure.
- Purchasing power - Credit card accounts can help your business make large startup purchases and help establish a credit history for your business.
Opening an Account
Some business owners open a business account at the same bank they use for their personal accounts. Rates, fees, and options vary from bank to bank, so you should shop around to make sure you find the lowest fees and the best benefits.
Opening a Checking or Savings Account
Here are things to consider when you're opening a business checking or savings account:
- Early termination fees
- Interest rates for lines of credit
- Interest rates for savings and checking
- Introductory offers
- Minimum account balance fees
- Transaction fees
Opening a Merchant Account
Here are things to consider when you're opening a merchant services account:
- ACH daily batch fees - Fees charged when you settle credit card transactions for that day
- Address Verification Service (AVS) fees
- Discount rate - The percentage charged for every transaction processed
- Monthly minimum fees - Fees charged if your business doesn't meet the minimum required transactions
- Transaction fees - The amount charged for every credit card transaction
Payment Processing Companies
Payment processing companies are an increasingly popular alternative to traditional merchant services accounts. Payment processing companies sometimes provide extra functionality, like accessories that let you use your phone to accept credit card payments. The fee categories that you need to consider will be similar to merchant services account fees. If you find a payment processor that you like, remember that you'll still need to connect it to a business checking account to receive payments.
You're Now Ready to Open Your Business
Congratulations! It's time to cut the big ribbon. Your business is officially open. Now, focus on managing and growing your business.